Awfis-onomics: Inside The Rise Of India’s Managed Office Economy
When the covid pandemic struck in March 2020, Awfis Space Solutions went from a Rs 20 crore monthly revenue and Rs 2 crore monthly Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) to just Rs 9 crore in revenue and negative Rs 3 crore EBITDA by September that year. For most businesses, that would have been a breaking point. For Awfis Chairman and Managing Director Amit Ramani, it was a turning point.
“We went from Rs 20 crore revenue to Rs 9 crore and negative Rs 3 crore EBITDA,” Ramani recalls, during his recent Bengaluru visit. “But six months into it, I told my team we will go from 50 locations to 100 and that too, at the peak of covid.”
That audacious move paid off. The company not only survived but came out stronger, with new demand drivers and a validated business model. “If we were a pure straight-lease company, we would’ve gone bankrupt,” he says. “Because we were a mix of landlord-partners, we came out much better than the others.”
The resilience tested during covid reshaped the company’s DNA. “We learned the value of client relationships. We supported a lot of clients with deferments and discounts, and those same clients came back and blessed us,” he adds. From 1,200 client companies before the pandemic, Awfis today serves 3,500.
Between 2021 and 2024, Awfis clocked a compound annual growth rate (CAGR) of about 70 per cent, growing 42 per cent last year and projecting 30 per cent growth in FY26. “We were at Rs 250 crore revenue during covid and rebuilt it to Rs 1,200 crore last year. This year, we’ll do about Rs 1,550 crore,” says Ramani.
From Co-Working to Integrated Workspaces
Founded in 2015, Awfis began by solving for flexibility, accessibility and ease of use in office space: giving businesses the ability to choose “one seat or a hundred seats, one day or five years — their choice.”
Over time, the company evolved a model Ramani calls “managed aggregation.” “Eighty to 90 per cent of new capital comes from the landlord. There’s no fixed rent. We give a minimum guarantee, 50 per cent of market rent, which starts from the fifth to the thirteenth month. After covering operating expenses, 70 per cent of the profit goes to the landlord, 30 per cent to us.”
It’s an asset-light model that solved what Ramani calls “the global coworking problem," capital-heavy leases with high fixed risk.
Today, Awfis operates 250 locations across 19 cities, with 1.5 lakh seats and its client mix has flipped dramatically. “Before 2020, 30 per cent were corporates and 70 per cent were freelancers, SMEs and mid-size companies. It’s now the other way around. Large clients are 65 per cent,” says Ramani.
The average lock-in tenure is 24 months, while large clients stay for about 44 months on average. The flagship product still makes up 90 per cent of Awfis’s portfolio, priced between Rs 8,000 and Rs 12,000 per seat per month, with the premium Gold and Elite lines commanding Rs 12,000-20,000.
The company reported Rs 900 crore in flex coworking revenue last year, 70 per cent from coworking and 30 per cent from managed offices. An additional 12 per cent came from alternate revenue streams such as food and beverage, IT and mobility solutions.
Ramani’s ambition is larger than flexible offices. “We want to be the single-stop solution for anything commercial workplace related. Be it furniture, coworking, managed office, design-build or transportation,” he says.
The design and build (D&B) segment, launched three years ago, already contributes 25-26 per cent of revenue and is scaling fast. “We will become one of the first branded players in the public design-build space,” Ramani says. “The opportunity is very, very large.”
Even with diversification, the core business remains strong. “We have projected 30 per cent growth in our coworking business. All the other ones will grow at a similar pace, giving us 25-30 per cent overall growth over the next three to five years.”
On capital allocation, Ramani clarifies, “Our Rs 200 crore capex for FY26 is a hundred per cent towards the core business. Design-build is a service. I don’t need capital for it. We use contract manufacturing for furniture, so no capital is tied up there.”
Financially, Awfis has emerged among India’s most efficient growth stories. “Our Return on Capital Employed (ROCE) last year was 62 per cent. This year, we’ll cross 70 per cent,” Ramani says. “Very few companies on NSE grow at 30 per cent and have a ROCE of 70 per cent.”
He adds, “We are at 14 per cent EBITDA margin now. As occupancy stabilises at 85 per cent, margins will move to 18-19 per cent in three to four years.”
India’s Office Market
When Awfis began in 2015, coworking in India was pretty much ground zero. “There were barely a couple of companies,” Ramani recalls. “By 2020, it was a 25 million square foot industry. By 2026, it’ll cross 100 million square feet, a fivefold growth story.”
Today, 20 per cent of all commercial leasing in India happens through flexible workspaces. “It’s a Rs 14,000-15,000 crore market,” Ramani says. “The target market this year was about USD 800-900 million, which will grow to USD 2.5-3 billion in the next three to four years.”
The shift is driven by companies’ appetite for flexibility and convenience. “It’s like 10-minute delivery,” Ramani says. “Once you’ve tasted it, you don’t go back. You don’t have to manage your real estate, build it out, or deal with the headaches.”
Competition has intensified but remains concentrated. “In 2020, there were 300 operators. Now maybe 400. But the top five, including us, control 60 per cent of the market,” he points out. “For large enterprises, brand is critical. It’s like trusting HDFC or Apple. You can’t go wrong with your workspace.”
http://business-world-image-bucket.s3.ap-south-1.amazonaws.com/market leaders.jpgSource: UnearthInsight
Still, the growth is uneven. “We’re in 19 cities: nine Tier-1 and ten Tier-2. Eighty-five per cent of our portfolio is still Tier-1,” Ramani says. The constraint, he explains, is not demand but supply compliance.
“If you go to Jaipur, I have a 5,000-seat demand, but no compliant assets. In metros, you take fire NOCs and occupancy certificates for granted. In Tier-3, they don’t exist.”
Without institutional-quality supply, expansion remains limited. “Tier-3 can’t grow till we get good landlords and developers,” he says. “Even in Indore, when we entered four years ago, vacancy was 45 per cent. Today it’s less than 1 per cent, how will you expand?”
IT and GCC Market
About 40 per cent of Awfis’s portfolio today is tied to IT and IT-enabled services, with GCCs (Global Capability Centres) driving the next phase of growth.
“India’s commercial market is roughly 40-45 per cent IT. About 30 per cent comes from domestic IT firms, 30 per cent from IT/ITeS outsourcing and 30 per cent from GCCs,” Ramani explains. “Some of the IT/ITeS weakness has been taken over by GCCs.”
India had about 1,500 GCCs last year, projected to rise to 2,400 in the next three years. “They’ll employ 4.5 million people, up from 1.8 million,” Ramani says.
Awfis has built strong partnerships with firms like Zinnov, EY, and Genpact. “Out of the last 50 GCCs that came to India, 11 were with us,” he says.
He sees India’s broader commercial real estate story as vastly underdeveloped. “New York City’s six boroughs have 450 million square feet. India has about a billion and we have 1.4 billion people,” Ramani points out. “By 2042, 50 per cent of India will live in 9 or 10 metro cities. When that happens, corporate real estate will explode.”
As for macroeconomic headwinds, Ramani remains unfazed. “Tariffs and H1-B visa actually were a blessing,” he says. “When companies can’t hire in the US, those jobs come to India. These are political blips with short shelf lives.”
He adds, “On the ground, I’m not seeing any headwinds. India’s macro is resilient. Unless there’s a black swan event, I don’t see problems.”
Future of Work and Outlook
Ramani has studied the evolution of workplace design since his early career. “In 2001, we coined the terms ‘telecommuting’ and ‘distributed work.’ It took 20 years and a pandemic for them to go mainstream,” he says.
Now, he believes the future of work is shifting from company-centric to employee-centric. “Earlier, the company decided where you sat and what you did. Today, the human-centered design is about the employee,” he explains. “If you’re asking me to travel three hours daily, make it worthwhile.”
Workplaces are now “central to company strategy,” he adds, with multi-generational teams coexisting from Gen Z to Baby Boomers. “It’s probably the first time in history that five generations are working together. To adapt to that, offices must offer multiple options.”
Ramani sees a future that has autonomous offices. “When you and I collaborate, the room will become a meeting room. When we need quiet work, it’ll adapt to give privacy. With AI, it will happen faster than we can imagine,” he says. “When I walk into a chamber and say I want to meet someone, it will direct me to a ready space. That’s where flexibility in life will come.”
The hybrid work model, too, is still maturing. “Companies are grappling with it,” Ramani says. “If everyone wants to come Tuesday through Thursday, I still need 100 per cent capacity. Over time, firms will define who comes when and then they can use less space.”
Ramani’s clarity about scale, capital discipline and diversification points to good bit of maturity of a company entering its second decade. “We are clear for FY26, 30 per cent growth and Rs 1,600 crore revenue target,” he says.
Awfis’s model, asset-light, diversified, and innovation-driven, has already changed how India thinks of office space. “We wanted to be the HDFC of coworking,” Ramani says. “We are now the single-stop solution for workplaces.”
As he sums up: “We can’t predict beyond three years covid taught us that. All we can do is innovate, hustle and create new avenues for growth. And we’ll continue to do that.”
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